EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE
This
employment agreement is made and entered into as of May 19, 2009, between
ISORAY, INC., a Minnesota corporation (the "Company"), and Xxxxxxxx Xxxx, an
individual residing at 000 Xxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
("Employee").
RECITALS:
A. Employee
is and has been the Chief Financial Officer of the Company and the Company
desires to have the continuing benefit of Employee's knowledge, experience and
services in the operation of the Company; and
B. The
Board of Directors of the Company considers sound and vital management to be
essential to the overall success of the Company and has decided to employ
Employee on the terms and conditions set forth herein.
AGREEMENT
In
consideration of the covenants and agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
For purposes of this Agreement, the following terms shall have the
meanings indicated:
1.1
Change
in Control means either (1) the closing of any merger, combination,
consolidation or similar business transaction involving the Company in which the
holders of common stock or other equity immediately prior to such closing are
not the holders of a majority of the ordinary voting securities of the surviving
entity in such transaction; (2) the closing of any sale by the Company of all or
substantially all of its assets in a single transaction or a series of related
transactions outside the regular course of business to an acquiring entity in
which the holders of a majority of ordinary voting securities immediately prior
to such closing are not the holders of a majority of the ordinary voting
securities of the acquiring entity; or (3) a share exchange whereby fifty-one
percent (51%) or more of the common stock or other equity is exchanged for stock
or equity in another entity other than for the purpose of a change in domicile
of the state of incorporation or organization of the Company.
1.2 Company
means IsoRay, Inc. or any successor entity.
1.3 Company
Board means the Company Board of Directors or the Board of Directors of
any successor entity of the Company.
1.4 Compensation
Committee means the Compensation Committee of the Company Board or, in
the event there is not a Compensation Committee of the Company Board, any
committee of the Company Board or other body of members of the Company Board
performing a similar function.
1.5 Effective
Date. The effective date of this Agreement is May 19, 2009.
1.6 Good
Reason means the occurrence of any of the following events to which
Employee has not expressly agreed to in writing:
a. A
material reduction in Employee's base salary as in effect on the Effective Date
or any renewal date of this Agreement, whichever occurs later;
b. A
material reduction in any fringe benefit provided to the Employee below the
level of such fringe benefit provided generally to other actively employed and
similarly situated executives of the Company;
c. The
change, in a materially adverse manner, of Employee's title, position, authority
or responsibilities (including reporting responsibilities and
authority);
d. Employee
will not be relocated, without his consent, to any place outside of the
Richland, Washington area, except for required travel by Employee on the
Company's business to an extent substantially consistent with Employee's
business travel obligations at the Effective Date; provided,
however, that, if the Company Board and Employee determines a relocation
is necessary, the Company shall pay all of the Employee's reasonable moving and
other relocation expenses, and such new location and such relocation shall not
constitute "Good
Reason" hereunder;
e. The
failure of the Company to obtain the assumption of this Agreement by any
successor, assignee, affiliate, or parent of the Company; and
f. Any
material breach by the Company of any provision of this Agreement which is not
cured by the Company within sixty (60) days written notice from Employee
specifying the nature of such breach.
1.7 Termination
for Cause means the termination of employment of Employee by the Company
Board because of Employee's personal dishonesty, willful misconduct, intentional
failure to perform his stated duties, willful violation of any material law,
rule or regulation resulting in a detriment to the Company or reflecting upon
the Company's integrity (other than traffic infractions or similar offenses) or
a material breach by Employee of any term of this Agreement and failure to cure
such breach within sixty (60) days after receipt of written notice from the
Company specifying the nature of such breach or to pay compensation to the
Company deemed reasonable by the Company if breach cannot be cured.
1.8 Total
and Permanent Disability means an injury or illness of Employee that
prevents him from performing his customary duties and which is expected to be of
long continued and indefinite duration and that has caused Employee's absence
from service for at least sixty (60) days.
2. Employment.
The Company hereby employs the Employee and the Employee accepts
employment on the terms and conditions set forth herein.
2.1 Term.
The term of this Agreement shall commence on the date hereof and shall
end on the close of business on the day after the first anniversary of the date
of commencement, unless terminated in accordance with the provisions of Section
3 hereof. The term hereof shall be extended automatically for an additional one
(1) year on each anniversary date hereof, unless prior to ninety (90) days
before any such anniversary date the Compensation Committee decides to modify
the term of, or to terminate the agreement in accordance with the provisions of
Section 3 of this Agreement.
2.2 Duties
and Responsibilities. Employee shall serve as Chief Financial Officer and
Treasurer, shall report to the Chief Executive Officer, and shall be responsible
for such duties as may be assigned to him from time to time by the Chief
Executive Officer.
2.3 Compensation.
During the term of this Agreement and so long as Employee's employment
has not been subject to Termination for Cause, he shall be entitled to the
salary and other employment benefits provided in this Section 2.3
notwithstanding the level of compensation or benefits received by similarly
situated employees. Employee shall be entitled to an annual salary of no less
than $144,200, payable pursuant to the Company's employment compensation policy
as it may exist from time to time, with increases as may be made from time to
time in accordance with the Company's regular salary administration practices as
applied to executive officers of the Company. Employee shall be entitled to
reimbursement for business expenses on a basis no less favorable to Employee
than in accordance with the policy of the Company on the Effective
Date. Employee shall also be entitled to continuing participation, consistent
with past practices, in all employee benefits plans and practices of the Company
in place on the Effective Date, including, without limitation, life, long-term
disability and accident insurance, employee savings and investment plans, stock
plans, medical, dental, hospitalization and other welfare benefit plans, and
vacation plans, without any material reduction in the value of the Company
provided benefits.
2.4 Performance
Bonus. Employee shall be eligible to receive annual bonus payments under
a bonus plan as established by the Compensation Committee based upon performance
goals established in writing and agreed to by Employee and the Compensation
Committee within ninety (90) days of the Effective Date and each anniversary of
the Effective Date.
3. Termination. Employee's
employment under this Agreement shall terminate upon the occurrence of any of
the following events:
3.1 Total
and Permanent Disability. In the event that Employee suffers Total and
Permanent Disability, the Company may terminate Employee's employment, but shall
be obligated to continue Employee's then regular salary and continue his
benefits hereunder for a twelve month period. Employee agrees, in the event of
any dispute under this Section, to submit to a physical examination by a
licensed physician selected by the Company, the cost of such examination to be
paid by the Company, and the decision as to Employee's disability shall be
conclusive and binding upon the Company and Employee. Nothing contained herein
shall be construed to affect Employee's rights under any disability insurance or
similar policy, whether maintained by the Company, Employee or another
party.
3.2 Death.
This agreement shall terminate upon the death of the Employee and no
further liability to Employee or to Employee's estate hereunder shall remain
other than the payment, within ninety (90) days of termination, of any accrued
but unpaid compensation as set forth in Section 2.3 hereof. Nothing contained
herein shall be construed to affect Employee's rights under any life insurance
or similar policy, whether maintained by the Company, or another
party.
3.3 Termination
for Cause. The Company may terminate Employee's employment for Cause. The
Company shall have no further obligation to pay salary or benefits hereunder
after the date of any Termination for Cause or termination by employee other
than for Good Reason, but shall be obligated to pay, within ninety (90) days of
the termination, any accrued but unpaid compensation as set forth in Section 2.3
hereof.
3.4 Good
Reason. Employee may terminate Employee's employment for Good Reason at
any time during the term of this Agreement. In the event Employee terminates his
employment for Good Reason, or the Company terminates Employee's employment
"without Cause", the Company shall continue to be liable to Employee for the
payment of Employee's compensation including medical and dental benefits as set
forth in Section 2.3 hereof for a twelve month period. In addition, all unvested
stock options granted to Employee shall immediately vest in full and shall be
exercisable as provided in the applicable stock option plan.
3.5 Change
in Control. In the event Employee's employment is terminated by the
Company for any reason other than the death or disability of the Employee or for
Cause, within one year from the date on which a Change in Control occurred, (i)
the Company shall continue to be liable to Employee for the payment of
Employee's compensation including medical and dental benefits as set forth in
Section 2.3 hereof for an eighteen month period and (ii) all unvested stock
options previously granted to Employee shall immediately vest in full and shall
be exercisable as provided in the applicable stock option plan.
4. Covenant Not to Compete and
Confidentiality
4.1 Covenant
Not to Compete. Employee shall not engage in any business or perform any
service, directly or indirectly, or have any interest, whether as a proprietor,
partner, employee, investor, principal, agent, consultant, director or officer,
in any enterprise which manufactures and markets radioisotopes or radioactive
brachytherapy devices for commercial purposes or which is in competition with
the business of the Company (i) during the term of his employment, or (ii) one
(1) year after termination of this Agreement; provided,
however, that this Covenant Not to Compete shall not apply if Employee's
employment is terminated by the Company without Cause; or by Employee for Good
Reason; or if Employee makes himself available for employment by the Company at
the end of the term of this Agreement upon similar terms and conditions to those
contained herein and the Company thereupon refuses to employ Employee. Nothing
in this Section 4 shall be deemed to prohibit Employee from purchasing less than
five percent (5%) of the outstanding shares of any corporation whose shares are
traded on a national exchange and which, at the time of purchase, is not engaged
in competition with the Company.
If any
court shall determine that the duration or geographical limit of the foregoing
restriction is unenforceable, it is the intention of the parties that the
foregoing restriction shall not be terminated but shall be deemed amended to the
extent required to render it valid and enforceable, such amendment to apply only
with respect to the operation of this Section 4 in the jurisdiction of the court
that has made the adjudication.
4.2 Confidential
Information. Employee acknowledges that he has and will have access to
trade secrets and confidential business information of the Company and its
subsidiaries throughout the term of this Agreement and that any such trade
secret or confidential information, regardless of whether Employee alone or with
others developed any such trade secret or confidential information, shall be and
shall remain the property of the Company. During the term of this Agreement and
after termination of employment, Employee shall not, either voluntarily or
involuntarily, on either his own account, as a member of a firm, or on behalf of
another employer or otherwise, directly or indirectly use or reveal to any
person, partnership, corporation or association any trade secret or confidential
information of the Company, its parent, subsidiaries, or affiliates. Such trade
secrets shall include, but shall not be limited to, business plans, marketing
plans, or programs, financial information, forecasts, compensation arrangements,
contracts (whether leases, financing arrangements, or other contracts) customer
lists, and business opportunities. The term "trade secrets" shall not include
information generally available to the public or a governmental agency except
such term "trade secrets" shall include information provided to the Securities
and Exchange Commission or other governmental agency on a confidential basis.
Employee will not make available to any person, partnership, limited liability
company, corporation or association, or retain after termination of employment,
any Company policy manuals, contracts or other written materials.
4.3 Injunctive
Relief. Employee acknowledges that the restrictions contained in this
Section 4 are a reasonable and necessary protection of the immediate interests
of the Company and that violation of these restrictions would cause substantial
injury to the Company. In the event of a breach or threatened breach by Employee
of these restrictions, the Company shall be entitled to apply to any court of
competent jurisdiction for an injunction restraining Employee from such breach
or threatened breach; provided,
however, that the right to apply for an injunction shall not be construed
as prohibiting the Company from pursuing any other available remedies for such
breach or threatened breach.
5. Binding
Effect; Assignment. This
Agreement shall be binding upon and inure to the benefit of Employee, the
Company and their respective heirs, executors, administrators, successors and
assigns; provided,
however, that Employee may not assign his rights hereunder without the
prior written consent of the Company and may not assign his obligations
hereunder. The Company may assign either its rights or obligations hereunder to
any successor to substantially all of the assets or business of the
Company.
6. Amendments. This
Agreement may not be amended, modified or supplemented in any respect except by
a subsequent written agreement executed by the Company and
Employee.
7
Miscellaneous.
7.1 Entire
Agreement. This Agreement rescinds and supersedes any other agreement,
whether oral or written, relating to Employee's employment by the Company, and
contains the entire understanding between the parties relative to the employment
of Employee, there being no terms, conditions, warranties, or representations
other than those contained or referred to herein, and no amendment hereto shall
be valid unless made in writing and signed by both of the parties
hereto.
7.2 Governing Law.
This Agreement shall be interpreted and construed in accordance with the
laws of the State of Washington as applied to residents of Washington without
regard to conflicts of law principles.
7.3 Severability.
In the event that any provisions herein shall be legally unenforceable,
the remaining provisions nevertheless shall be carried into effect.
7.4 Attorneys' Fees.
In the event of any litigation between the parties hereto arising out of
the terms, conditions and obligations expressed in this Agreement, the
prevailing party in such litigation shall be entitled to recover reasonable
attorneys' fees incurred in connection therewith.
7.5 Notices.
All notices required or permitted to be given hereunder shall be deemed
given if in writing and delivered personally or sent by telex, telegram,
telecopy, or forwarded by prepaid registered or certified mail (return receipt
requested) to the party or parties at the following addresses (or at such other
addresses as shall be specified by like notices), and any notice, however given,
shall be effective when received:
To
Employee:
Xxxxxxxx
Xxxx
000
Xxxxxxxxx Xxxx
Xxxxxxxx,
XX 00000
To
Company:
000 Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
7.6 Waiver. The
waiver by any party of a breach of any provision of this Agreement by the other
shall not operate or be construed as a waiver of any subsequent breach of the
same provision or any other provision of this Agreement.
7.7 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
7.8 Headings.
The subject headings to the sections in this Agreement are included for
purposes of convenience only and shall not affect the construction or
interpretation of any of its provisions.
7.9 Construction.
Each party has had the opportunity to set forth in this Agreement all
matters related to the subject hereof. The Company and Employee acknowledge the
binding legal effect of this Agreement, that this Agreement has been negotiated
by the parties hereto and that each party has, to the extent desired, sought
legal counsel related to the terms, conditions and effect of this
Agreement.
7.10
Assistance in
Litigation. Employee shall upon reasonable notice, furnish such
information and reasonable assistance to the Company as it may reasonably
require in connection with any litigation in which it is, or may become, a party
either during or after employment.
7.11
Limited
Effect of Waiver by Company. Should the Company waive breach of any
provision of this Agreement by the Employee, that waiver will not operate or be
construed as a waiver of further breach by the Employee.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
hereinabove written.
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COMPANY:
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ISORAY,
INC., a Minnesota corporation
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By:
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/s/ Xxxxxx Xxxxxxx
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Xxxxxx
Xxxxxxx, Chief Executive Officer
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ATTEST:
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EMPLOYEE:
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By:
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/s/ Xxxx Xxxxxxxx
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By:
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/s/ Xxxxxxxx Xxxx
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Xxxxxxxx
Xxxx
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